Different factors are to be considered before buying a commercial property in Pakistan. Sometimes experienced investors are also mistaken due to the lack of evaluation before investing. Anzo Marketing will guide you with the help of this blog to check some factors before buying commercial real estate in Pakistan.
There are several kinds of commercial real estate in Pakistan, such as offices, shops, warehouses, and plots. You can also have a look at this blog, where we discuss about What factors to think when making the decision for investment.
Some of the factors are as follows:
- Collecting Basic Property Information
- Conducting Building Inspections
- Assessing Tenant Information
- Reviewing Statements and Agreements
- Checking Property Documents
Collecting Basic Property Information
The first step you must check before buying commercial real estate in Pakistan is collecting basic property information. In this, you check the information about the size of the property, the number of floors, the types of available properties, total commercial units, availability of parking area, provision of amenities and facilities, and the most important factor is the approval of No Objection Certificate (NOC) from the approved authorities.
All these details, once collected, should be cross-checked with the concerned authorities, such as the real estate agents or the sellers, for further verification. For example, if you want to verify the data in Lahore, Lahore Development Authority (LDA) is your go-to place. Similarly, Capital Development Authority (CDA) is a responsible authority in Islamabad.
It is suggested not to rely on something other than the seller’s information and verify it from other sources.
Conducting Building Inspections
The second step in the checklist is the conduction of building inspections. Different things are checked during the inspection. Commercial property investment is expensive, unlike residential. So we should be cautious. It is recommended to hire a professional inspector for the inspection.
The inspection includes checking every component of the structure. The components under inspection are the roof, walls, foundations, windows, doors, water system, sewerage system, gas and electricity connection, phone lines, emergency system, security systems, and other amenities.
Make sure to inspect the property according to the laws. It is good to check all the components beforehand to avoid any mishaps.
Assessing Tenant Information
Before buying any commercial real estate, it is important to collect all the information regarding the tenants. In addition, it is important to be aware of the businesses operating in the surroundings. Finally, you need to verify all the information about security deposits, monthly rents, and utility obligations.
You also need to look at the financial conditions of the tenants to avoid any inconvenience in collecting rent and meeting the deadlines. It is also suggested to look at the litigations of the tenants. The verification will ensure a positive reputation for your business and an effective rental yield.
Reviewing Statements and Agreements
After inspecting the physical status of the property, it is a wise decision to focus on the non-physical aspects as well. The non-physical aspects include the No Objection Certificate (NOC), building permits, maps, approved plans, environmental assessments, zoning documents, etc. You need to review all these documents before investing in real estate.
We also suggest ensuring that these contracts’ termination policy is without penalty. The insurance policy also needs to be discussed and finalised at this stage.
Checking Property Documents
The final step that is very necessary is checking and verifying the property documents. The following documents are required to be verified before buying commercial real estate in Pakistan:
- No Objection Certificate
- Sale Deed
- Mother Deed
- Approved Plan of the Property
- Bank Approval Certificate
- Power of Attorney
- Tax Receipts of Property
- Completion Certificate
When buying a small or big property, it is equally important to look at all the details and not miss anything. You need to spend some money on hiring experts instead of facing a huge loss due to a lack of experience. All investors need to follow this list before buying any property in Pakistan.